Targeted Probe and Educate (TPE) Audits and TPE Audit Appeals

The Centers for Medicare & Medicaid Services (CMS) has directed Medicare Administrative Contractors (MACs) to conduct Targeted Probe and Educate (TPE) reviews and billing audits of Medicare providers and suppliers. TPE audits were originally limited to pilot programs focused on inpatient admissions and home health care claims. Based on the success of the pilot programs, CMS authorized MACs to perform Medicare TPE audits of all Medicare providers and suppliers for all types of items and services billed to Medicare. When performing Targeted Probe and Educate (TPE) reviews, MACs audit Medicare providers and suppliers with a history of high claim error rates and billing practices or utilization rates that vary from their peers. TPE audits also target Medicare providers and suppliers that bill Medicare for services and items with high national error rates or otherwise generally pose financial risk to the Medicare program, which means Medicare providers or suppliers may be targeted for TPE review regardless of the their own billing practices. Wachler and Associates has represented Medicare providers and suppliers nationwide in Medicare audits, claim denials, and billing audits for over 35 years. As explained below, our healthcare attorneys have significant experience in guiding Medicare providers and suppliers through the TPE audit process, the Medicare appeals process, and disciplinary or other actions that may result from a TPE review.

Medicare providers and suppliers subject to a Targeted Probe and Educate (TPE) audit will receive an initial notification letter or “Notice of Review” from the MAC stating that the provider or supplier has been selected for a TPE review. The Notice of Review will indicate the reason(s) the Medicare provider or supplier has been targeted for a TPE audit including, for example, that “an analysis of your billing data has indicated aberrancies that suggest questionable billing practice.” The initial notification letter may also provide the data analysis that supports the MAC’s basis for the TPE review. For post-payment Target Probe and Educate audits, the Notice of Review serves as an Additional Documentation Request (ADR) that identifies the medical records requested for review by the MAC. For prepayment TPE reviews, the Notice of Review explains that the provider or supplier will receive an Additional Documentation Request (ADR) letter for each claim selected for review. For the majority of TPE audits and appeals handled by our firm, the Notice of Review indicates that the purpose of the claim review is “to ensure documentation supports the reasonable and necessary criteria of the services billed and follows Medicare rules and regulations.” As explained below, while the providers and items or services subject to TPE review will be determined by the individual MACs, CMS has indicated that the most common claim errors subject to TPE reviews include: (1) documentation does not support medical necessity; (2) encounter notes did not support all elements of eligibility; (3) missing or incomplete initial certifications or recertification; or (4) signature of the certifying physician was not included in the record. Please see below for the types of Medicare providers and suppliers, services, and items identified by the individual MACs for TPE reviews.

TPE reviews are unique from other Medicare audits. The Notice of Review initiates the TPE audit process, which may include up to three (3) rounds of prepayment review or post-payment review. For the first round, MACs will review between twenty (20) to forty (40) claims and the supporting medical records to determine whether the documentation supports compliance with Medicare rules and billing requirements. If the Medicare provider or supplier is deemed in compliance with Medicare rules by the MAC following this initial review, the provider or supplier will be released from the TPE review process and the MAC will not audit the provider or supplier on the same issue (i.e., type of service) for at least one (1) year absent significant changes in Medicare billing practices. If the MAC identifies errors and/or denies claims during the initial round of review, the MAC will provide a results letter detailing the billing errors or other basis for the claim denials. The TPE results letter will also offer the Medicare provider or supplier a one-on-one (1-on-1) education session with the MAC’s provider outreach and education staff, which includes the opportunity to review the TPE audit results and discuss the errors and CMS policies related to the services or items under review. Following a first round of review when the MAC identifies errors, denies claims, or establishes a Medicare overpayment, the MAC will wait at least forty-five (45) days in order to allow the Medicare provider or supplier to make changes and improve their billing and documentation practices. After expiration of the forty-five (45) day wait period, the MAC will initiate the second round of the TPE review process by identifying claims and requesting supporting documentation for a second batch of twenty (20) to forty (40) claims. The MAC will issue a second results letter identifying any claim errors and claim denials identified in the second round of the TPE review. The MAC will also offer a second round of education with the MAC provider outreach and education staff. Medicare providers and suppliers that continue to demonstrate high error rates or lack of improvement in the second round of TPE review will be subject to a third round of the TPE audit. CMS has indicated that error percentages that evidence a high error rate or high denial rate will differ based on the service or item subject to review, however the key metric in avoiding subsequent rounds of review will be the Medicare provider’s or supplier’s improvement from round to round. If a provider or supplier fails to increase the accuracy of their claims or otherwise adequately improve after three (3) rounds of TPE review, MACs will refer the provider or supplier to CMS for additional disciplinary review including, but not limited to, prepayment review, extrapolation of overpayment, referral to a Recovery Auditor (e.g., Zone Program Integrity Contractor or “ZPIC”), or other disciplinary actions that may include suspension of Medicare payments, revocation of Medicare billing privileges, or exclusion from the Medicare program. Additionally, the failure of a provider or suppler to demonstrate compliance with Medicare rules and billing requirements for one service or item subject to a TPE review may result in additional TPE audits for other items or services as each item and service may be subject to separate probes under the TPE program.

As explained below, Medicare providers and suppliers may challenge TPE claim denials and TPE overpayments through the regular Medicare appeals process. TPE claim denials overturned on appeal will be taken into consideration during subsequent rounds in the TPE review process, as well as impact the MACs decision to refer the provider or supplier to a recovery auditor (e.g., Zone Program Integrity Contractor (ZPICs) or Unified Program Integrity Contractor (UPICs)) and CMS determination regarding further disciplinary actions. Successful TPE audit appeals may also mitigate risk that the Medicare provider is selected for a TPE review of different items or services.

TPE reviews and TPE audit overpayment determinations may be appealed through the Medicare Appeals Process. The first stage of appeal will be to request redetermination of the overpayment by the MAC. If the redetermination decision is unfavorable, Medicare providers and suppliers may request an independent review by filing a request for reconsideration with the Qualified Independent Contractor (QIC). If the reconsideration decision is unfavorable, Medicare providers and supplier are granted the opportunity to present their case in a hearing before an Administrative Law Judge (ALJ). While providers or suppliers who disagree with an ALJ decision may appeal to the Medicare Appeals Council and then seek judicial review in federal district court, it is crucial to obtain experienced healthcare counsel to overturn the overpayment determination during the first three (3) levels of review.

Our healthcare law firm has represented thousands of Medicare providers and suppliers in appeals of Medicare audits and overpayments nationwide for over 35 years. Our health law attorneys regular provide speeches and author articles and other guidance regarding Medicare audits on behalf of national organizations such as the American Health Lawyers Association (AHLA), American Bar Association (ABA) Health Law Section, Health Care Compliance Association (HCCA), Medical Group Management Association (MGMA), and many other national and state organizations.

When facing a significant TPE audit overpayment or other negative TPE review determination, Medicare providers and suppliers must appeal the TPE review. The Medicare appeals process allows the provider or supplier to overturn the TPE audit overpayment, and reduces the likelihood of future TPE reviews, other Medicare audits, and disciplinary actions such as suspension of Medicare payments, revocation of Medicare billing privileges, or exclusion from the Medicare program. In instances when a TPE audit identifies potential civil or criminal fraud, it is essential that the Medicare provider or supplier engages experienced healthcare counsel to appeal the Medicare overpayment as the first step in defending the provider’s or supplier’s billing practices and thus mitigating the likelihood of fraud allegations (e.g., False Claims Act actions)

Our healthcare attorneys also assist providers in responding to the initial notification letter or Notice of Review and Additional Documentation Requests (ADRs). By involving experience healthcare counsel at this initial stage of the TPE review process, Medicare providers and suppliers will be able to mitigate risk by initiating early communication with the MAC, reviewing medical records for potential issues, and preparing for the TPE audit overpayment and Medicare appeal. We also believe the opportunity for an education meeting with the MAC’s provider outreach and education staff is an excellent opportunity for providers and suppliers facing a TPE review. In addition to receiving the necessary guidance to eliminate Medicare billing errors for the next round of TPE review, Medicare providers will gain insight on their utilization, documentation practices, and other aspects of their Medicare claims in order for the provider or supplier to achieve prospective compliance and avoid future Medicare audits, Medicare enrollment actions such as suspension or revocation, and legal and administrative actions that may derail the provider’s or supplier’s business.

In sum, Targeted Probe and Educate (TPE) reviews are a unique type of Medicare audit. While TPE audits include additional features such as provider outreach and education, TPE audits require a Medicare appeal through the standard Medicare appeals process used for Medicare audits by ZPICs, UPICs, MACs, and all other Medicare contractors.

While the Targeted Probe and Educate pilot programs originally focused on inpatient admissions and home health care claims, Medicare contractors are now authorized to conduct Targeted Probe and Educate reviews for all types of Medicare providers and suppliers and all items and services billed to Medicare. As explained above, MACs will target outlier providers and suppliers with unusual billing practices, high utilization or claim error rates, and other aberrancies, as well as services and items determined by the MAC to be “high risk” services or items based on national error rates and general financial risk to the Medicare program. Pursuant to these guidelines, MACs are authorized to determine the providers or suppliers, services, and items that pose risk to the Medicare program.

MACs vary based on jurisdiction and the type of Medicare provider or supplier and item or service billed to Medicare. The following information has been disclosed by individual MACs regarding which providers or suppliers, services, and items will be subject to TPE audits and medical reviews:

Wisconsin Physician Services (WPS) (Jurisdiction 8 and 5 Part A and B MAC) has identified specific focus areas to conduct TPEs on. The focus areas are: Hyperbaric Oxygen Therapy, Qualified Health Care Professional Attendance and Supervision of Hyperbaric Oxygen Therapy, Skilled Nursing Facility RUG Utilization, Diagnostic Related Group Validation Review, Inpatient Rehabilitation Facility or Unit, Non-Emergent Ambulance Transport for Dialysis Services (Modified “J” Review), and Facilities Billing Emergency Room Services CPT Codes 99281-99285.

Noridian (Jurisdiction E Part A and B MAC) only has one active pre-payment service review, Skilled Nursing Facility Demand Mandates. As of June 8, 2018, Noridian Jurisdiction D DME MAC has finished conducting 15 TPEs for DME’s: Ankle foot/Knee-Ankle-Foot Orthosis, Diabetic Supplies, Enteral Nutrition, Hospital Bed, Immunosuppressive Drug, Knee Orthosis, Manual Wheelchair, Nebulizer, Oxygen and Oxygen Equipment, Parenteral Nutrition, Positive Airway Pressure (PAP) Devices, Spinal Orthoses, Surgical Dressing, Therapeutic Shoe and Inserts, and Urological Supplies. Noridian Jurisdiction A DME MAC is reviewing all of the same areas as Jurisdiction D, as well as Pressure Reducing Support Surfaces.

National Government Services (NGS) (Jurisdiction K and 6 Part A and B and Home Health & Hospice MAC) has identified specific focus areas to conduct TPEs on. The focus areas are: Diabetic Self-Management Training (J6A), Dental Services (JKA), Ambulance Services (J6B), Diagnostic Services (JKB), Demand Claims (J6 and JK HHH), and Cardiac Rehabilitation (J6 and JK FQHC).

CGS (Jurisdiction 15 Home Health & Hospice, Part A and B MAC and CGS Jurisdiction B and C DME MAC) has identified specific focus areas to conduct TPEs on. The Home Health &Hospice focus areas are: LOS (Length of Stay) with Non-Oncologic Diagnostics, LOS in long term care facility, non-skilled nursing facility, and hospice care provided in skilled nursing facility for any non-oncologic diagnosis code and a LOS greater than 180 days, GIP (General Inpatient) LOC (Loss of Consciousness) – hospice providers who submitted claims with revenue code 0656 greater than or equal to 7 days, No response to ADR (Hospice providers), Home health eligibility and medical necessity – home health claims with errors as identified in Home Health probe and educate round 2, LOS with hypertension, No response to ADR (Home health providers). The focus areas for Part A providers are: Codes 66984, 66983, 66982 for cataract removal, Code 62323 for spinal injections, Code 93798 for cardiac rehabilitation with continuous ECG monitoring, SNF RUG codes RUA, RUB, RUC, RUL, RUX, RVA, RVB, RVC, RVL, and RVX, and IRF CMGs 0110, 0704, 2004, 0604, 2003, 0304, 0603, 0904, 1003, and 0506. For Part B providers, the focus areas for medical review are: Critical care visits, Drugs, Emergency room visits, Home visits, Hospital visits, Labs and other tests, Modifier 25, New providers, Nursing facility visits, Nursing home/assisted living visits, Office visits, and Ambulances.

Palmetto (Jurisdiction M Part A and B and Home Health & Hospice MAC) has identified specific focus areas to conduct TPEs on. The focus areas for Part A are: Major joint replacement or reattachment of lower extremity without Major Complication or comorbidity, Psychoses, Ultra-high RUG codes, Hyperbaric oxygen therapy (HBO), Pegfilgrastim, Rituximab 100mg, Infliximab 10mg, Bevacizumab 10mg, Denosumab 1mg, Heart failure & shock with MCC and heart failure & shock with CC. For Part B, they are: Evaluation and management (E/M), subsequent hospital inpatient care (typically 35 minutes per day), Emergency room E/M, Critical care, first hour plus, E/M, and Therapeutic exercise. And for Home Health & Hospice they are: Home health services for eligibility and medical necessity.

Novitas is conducting TPE reviews of home health care providers, inpatient rehabilitation facilities, comprehensive outpatient rehabilitation facilities (CORFs), skilled nursing facilities (SNFs), hospitals, hospices, physicians and physician groups. Novitas’ TPE audits will also target specific items or services identified to present risk to the Medicare program including, but not limited to: End Stage Renal Disease (ERSD) services; severe malnutrition services; injections (including Denosumab or Prolia injections), intravenous immunoglobulin (IVIG), hyperbaric oxygen (HBO), cardiovascular services include nuclear medicine, hospital inpatient admissions, and home health services.

First Coast Service Options (FCSO) (Jurisdiction N Part A and B MAC) has identified specific focus areas to conduct TPEs on. For Part A: Inpatient Psychiatric Facility (MS-DRG 885: Psychosis); Inpatient Skilled Nursing Facility (RUX, RUL: Rehabilitation ultra-high & extensive services w/ ADL 2-10; RUC, RUB: Rehabilitation ultra-high with ADL 6-10; RUA: Rehabilitation ultra-high with ADL 0-5) and Inpatient Rehabilitation Facilities (CMG: Various CMGs) For Part B: E/M Services (99232-99333: Subsequent hospital care, per day, for the E/M of a patient; 99222-99223: Initial hospital care, per day, for the evaluation and management of a patient; 99291: Critical care, evaluation and management of the critically ill or critically injured patient; first 30-74 minutes; 99304-99306: Initial nursing facility care, per day, for the evaluation and management of a patient; 99307-99310: Subsequent nursing facility care, per day, for the evaluation and management of a patient; 99204-99205: Office or other outpatient visit for the evaluation and management of a new patient; 99213-99214: Office or other outpatient visit for the evaluation and management of an established patient; 99285: Emergency department visit for the evaluation and management of a patient; 99490: Chronic care management services); Clinical Labs (G0480-G0483: Drug test(s), definitive); Ambulance Service (A0428: Ambulance service, basic life support, non-emergency transport); Rehabilitation Services (97110: Therapeutic exercise and any additional therapeutic procedures and/or evaluations); Psychiatric Services (90832-90838: Psychotherapy); Drugs and Biologicals (J9299: Injection, nivolumab, 1 mg; J2778: Injection, ranibizumab, 0.1 mg; J0897: Injection, denosumab, 1 mg; J9035: Injection, bevacizumab, 10 mg; J0717: Injection, certolizumab pegol, 1 mg; J9271: Injection, pembrolizumab, 1 mg; J9355: Injection, trastuzumab, 10 mg; J2357: Injection, omalizumab, 5 mg; J1610: Injection, glucagon hydrochloride, per 1 mg) Diagnostic Studies (78815: Positron emission tomography (pet) with concurrently acquired computed tomography (ct) for attenuation correction and anatomical localization imaging; skull base to mid-thigh; 78492: Myocardial imaging, positron emission tomography (pet), perfusion; multiple studies at rest and/or stress; 78452: Myocardial perfusion imaging, tomographic (spect) (including attenuation correction, qualitative or quantitative wall motion, ejection fraction by first pass or gated technique, additional quantification, when performed); multiple studies, at rest and/or stress (exercise or pharmacologic) and/or redistribution and/or rest reinjection); and Surgical Services (37221: Revascularization, endovascular, open or percutaneous, iliac artery, unilateral, initial vessel; with transluminal stent placement(s), includes angioplasty within the same vessel, when performed; 37225: Revascularization, endovascular, open or percutaneous, femoral, popliteal artery(s), unilateral; with atherectomy, includes angioplasty within the same vessel, when performed; 37226: Revascularization, endovascular, open or percutaneous, femoral, popliteal artery(s), unilateral; with transluminal stent placement(s), includes angioplasty within the same vessel, when performed; 37227: Revascularization, endovascular, open or percutaneous, femoral, popliteal artery(s), unilateral; with transluminal stent placement(s) and atherectomy, includes angioplasty within the same vessel, when performed; 37229: Revascularization, endovascular, open or percutaneous, tibial, peroneal artery, unilateral, initial vessel; with atherectomy, includes angioplasty within the same vessel, when performed).